Conspiracy theorists who have long suspected the U.S. government of trying to thwart the growth of a decentralized cryptocurrency market may be onto something, according to a report by The Intercept published on Tuesday.
Bitcoin-Spying 'Oakstar' Project Focused on Counter-Terrorism
The media outlet claims to have obtained classified documents from whistleblower Edward Snowden, indicating that the National Security Agency (NSA) has been monitoring the bitcoin blockchain, the world's largest digital currency by market capitalization, and has made an urgent effort to "help track down senders and receivers of bitcoin". The leaked documents suggest that bitcoin surveillance remains a top priority for the agency, as it seeks to monitor groups that use bitcoin's anonymity for illicit activities.
In an internal NSA report dating back to March 2013, the agency indicated that it had used at least one source of information to target bitcoin users, leveraging its sophisticated tools to collect and analyze global internet traffic data, while also exploiting an unnamed software program which is said to protect the identity of users, reported The Intercept. One memo from the NSA, cited by the media outlet, suggested that the agency collected private information on bitcoin users including passwords, internet activity, and device identifiers.
The spying project, dubbed Oakstar, did not seem to target bitcoin traders in general, as its mission was described as "looking at organized crime and cyber targets that utilize online e-currency services to move and launder money. These illicit finance networks provide user access to international monetary systems while providing a high degree of anonymity.”
While the NSA had some interest in surveilling other smaller digital currencies, a March 2013 internal report indicated that "bitcoin is #1 priority." Bitcoin, which has been used to finance terrorism and launder money, has been a topic of concern for governments and lawmakers around the world. The NSA was also watching two other areas of activity, one being Liberty Reserve, which was shut down due to money laundering with cryptocurrency, while its founder was sentenced to 20 years in prison.
President Donald Trump recently signed an executive order banning U.S. citizens from buying Venezuela's new national cryptocurrency, the Petro coin.